Is There an End in Sight? Trade War Has Cost U.S. Electronics Companies at Least $10 Billion
The United States and China are currently in a months-long trade war, with seemingly no end in sight. Although the two countries have agreed to trade talks in October, the general feeling is that the sit down may not end in either party calling a truce.
Unfortunately, the unending standoff has negatively affected companies in the US, and consumers won’t be left out either. As of September 1st, electronics companies importing merchandise from China will have to pay a previously non-existent tax of 15% to the government.
Why so? President Trump’s administration is imposing tariffs on imports brought in from China, in a bid to discourage U.S. companies from doing business with the country. Unfortunately, you can’t wake up and change their way of doing business overnight.
The Consumer Will Meet the Expense
As such, they will most likely continue importing goods from the East Asian giant economy, then trickle down the taxation expense to the consumer. TVs, speakers, drones, AirPods, name them – they’ll all have a marked increase in price, thanks to the tariffs recently imposed.
Speaking about the situation, Consumer Tech Association’s (CTA) spokesperson Bronwyn Flores said that although said products may not immediately hike in price, consumers will start feeling the pinch by November.
This year’s Black Friday may not be as you’ve been anticipating, so she advises that the sooner you can buy your electronics, the better for you. Come holiday season, we’ll have gotten used to seeing these new prices, Flores confirmed.
In case you didn’t know, these recent tariffs aren’t the only ones to be imposed against items from China. They date back to July 2018 and have cost the electronics industry at least $10 billion, as CNBC reports.
To even worsen the situation, CTA raises concerns that these new tariffs differ from their predecessors in that they are targeting finished products. Previous ones were imposed on various components required to make said finished goods, but the latest move by the government is doing more harm than good, and especially by hurting consumers.
These new tariffs have been dubbed “List 4a” by trade experts, and they estimate that they affect consumer goods worth at least $52 billion. What’s more, not even the largest U.S companies are safe.
Apple Inc., which assembles most of its products in China, will have a number of its products affected by the 15% tax. It seems that not even the almost perfect relationship the company has with President Trump’s administration will save it from the tariffs.
And although the taxation affects all electronics companies in the States, Apple has become almost by default the poster child in this issue. Why wouldn’t it, when the company employs at least 1.4 million Chinese workers, and registers a drop in stock whenever the President tweets anything related to the China trade war?
In June, the company tried to negotiate with the government to avoid being affected by the tariffs, although things didn’t go their way. In a letter sent to those in authority, Apple argued that those due for implementation come September would affect all of their major products, and consequently reduce the company’s contribution to the US economy.
All the same, financial experts predict that Apple may, instead of adjusting the prices of its products upwards, absorb whatever costs the tariffs bring with them.
More in Global
Invest or Pay Off Debt: Which One Should You Do First?
What came first, the chicken or the egg? This causality dilemma is very much relevant to our finances, especially when it...September 18, 2019
Smart Ways to Bring Down Your Car Insurance Premiums
The good news about car insurance is that it can take you less than 5 minutes to compare prices and find...September 18, 2019
Retirement Resolutions You Must Fulfill Now Before It’s Too Late
Most people believe that having a career that you have always wanted or a well-paying job means that you’ll be able...September 18, 2019
Tips to Help You Achieve Your Saving Goals in 2019
Achieving Your Saving Goals A mere resolution to increase your savings in 2019 might not be sufficient to help you achieve...September 18, 2019
Topshop Billionaire Philip Green Lost $3 Billion in 3 Years, Here’s What Happened to His Once-Glorious Empire
Online retailers are taking the world by storm, and you just have to take a look at how huge Amazon has...September 16, 2019
How The Beatles Helped Michael Jackson Make $1 Billion from This Shrewd Investment
As much as Michael Jackson was a talented singer and dancer, he was also an entrepreneurial mastermind who made some profitable investments...September 15, 2019
Jim Chanos Addresses Silicon Valley CEOs Excessive Exaggerations
Common lying problem Founder and managing partner of Kynikos Associates, Jim Chanos has reportedly stated that lying is becoming a problematic...September 15, 2019
Breaking: Rats Videoed Running Inside Buns Bags at Burger King
A Facebook user named Shantel Johnson, took to her page to share a video of rats running through a bag of...September 15, 2019
Want to Know Your Financial Advisor More? See If He Has These Skills
A financial advisor is also referred to as financial planner or wealth manager. He advises his clients on how to manage...September 15, 2019